Leveraging refers to using leverage to amplify own funds for investment. For example, if you have 2 million of your own funds and raise 2 million from a securities company, then the investor's principal will be 4 million. Leveraging in my country's stock trading is mainly achieved through margin financing and securities lending.
Financing refers to investors borrowing funds from securities companies to buy stocks, and repaying the principal and interest within the agreed period; securities lending refers to investors borrowing stocks from securities companies to sell, and buying the same amount within the agreed period
and types of securities are returned to the brokerage and the corresponding fees are paid.
Extended information 1. Several common ways to increase leverage 1. Borrow money from relatives and friends to increase leverage. When people need help, they often seek help directly from the people around them.
If you can borrow idle funds from relatives and friends to buy stocks, the financing cost of this method is the lowest. If you have a good relationship, you don't have to pay interest. However, if you make money, you should still give out red envelopes.
Everything is easy to explain when you make money, but it is difficult to explain if you lose money.
Therefore, you must be cautious when adding leverage. You can use it when the market is good.
The risk of long-term leveraged stock trading is still very high. After all, no one can predict the rise and fall of the stock market.
2. Add leverage to online lending. First of all, the state stipulates that bank credit loan funds cannot flow into the stock market, so friends who want to use credit cards to withdraw cash, or use online loans such as Jiebei, Weilidai, and Jingdong Gold Bars to speculate in stocks should
Be cautious.
Firstly, it is illegal to add leverage in this way. Secondly, the interest cost is also very high. Basically, the annual interest rate is above 15%.
The annual returns of many public fund managers may not reach this level. How many ordinary retail investors can guarantee that they will earn more than 15% a year?
3. Bank loans plus leverage. Small-amount bank loans are generally credit loans, which do not require mortgage or collateral, but large-amount loans require certain asset credit.
You can refer to commercial loan interest rates for small loan costs. Large mortgage loans generally require real estate, cars, or other valuable assets as collateral. The interest rates are slightly lower but the approval time is longer.
This method of leveraging is relatively reliable. By paying a small amount of interest, you can obtain long-term, stable leveraged funds without having to ask relatives and friends for help.
4. Securities companies increase leverage through the margin trading and securities lending business of securities companies. Since the stock market crash in 2015, this area has been strictly regulated. Generally, you can only double the leverage. That is to say, the securities company will increase the leverage according to your principal.
How much financing can we give you?
However, small retail investors generally do not meet the threshold for opening margin trading permissions, so this method can be ignored.
Qualified retail investors can only use cash for financing at a ratio of 1:1. Financing in stocks generally offers a discount ranging from 50 to 30%, and they also need to pay an annual interest rate of 8%.
5. It is generally not recommended to use this method for third-party capital allocation companies to increase leverage. First, it is difficult to find the entire capital allocation company. If you are accidentally cheated by a scammer company, the principal will be put into a private account to give you a simulated trading account.
Even if it is a formal capital allocation company, the leverage is 5 to 10 times high, and the position can be liquidated easily, and the handling fees are also terrifyingly high.